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College is a good investment

In an economy where cuts to higher education have become the norm, college tuition continues to rise to cover the lack of funding. However, in a recent article by the Atlantic titled What’s More Expensive Than College? Not Going to College,  the author explores the cost of not attending college.

Citing a study by the International Youth Foundation, the article compares the cost of NEETs (Not Engaged in Employment/Education or Training) across the globe.                                                                                                                   

“A 2012 U.S. study put the social cost per NEET youth at $37,450, when you factored in lost earnings, public health spending, and other factors. That brings the total cost of 6.7 million NEET American youths to $4.75 trillion, equal to nearly a third of GDP, or half of U.S. public debt.”

Countries with a lower percentage of NEETs include Portugal, Canada, France, Germany, and Norway.

The article also points to other data such as:

“- College graduates currently earn  80 percent more than people who do not complete high   school.

– A 2009 McKinsey report estimated that if we raised our education performance to the level of Korea, we could improve the US economy by more than $2 trillion. (We could, in other words, add the GDP of Italy to our economy with education reform.)

– A study from NBER (National Bureau of Economic Research) estimated that the benefit of a good teacher over an average teacher could improve a student’s future lifetime earnings by $400,000. “

The earning potential of a two or four year college degree is even greater when compared to other personal investments like the stock market or gold. An associates degree has a 20 percent return. Investment in gold has less than a 5% return.

(See graph above– click to enlarge)

 

Read more about this story at The Atlantic.

 

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